Kentucky’s New Medicaid Program Imposes A Work Requirement. Is It Too Complex To Succeed?

Four days ago, published a blog post that praised the Commonwealth of Kentucky’s new Medicaid program for supporting the principles of flexibility and choice. And yet, with some trepidation, the post also suggested that the imposition of an “administrative deductible account” may make the program too complex to succeed.

Do you disagree? Do you believe, instead, that Kentucky’s deductible account is a manageable feature? Even if you do, you may wish to pause before expressing general support for the program. Regrettably, there is a different feature that is even more complex than the deductible account!

What is that feature? It is the work requirement that is imposed on Medicaid recipients. Although the Obama Administration refused to require employment as a precondition for receiving medical services, the Trump Administration has endorsed Kentucky’s decision to require it.

Reasonable minds may differ about the moral implications of requiring people with maladies to work for their medical care. But all reasonable individuals should be willing to agree that any work requirement — or any other requirement, for that matter — must be defined in a manner that isn’t hopelessly complex.

So … is Kentucky’s Medicaid work requirement too complex to succeed? Let’s review the guidelines of the HEALTH Program’s Requirements Specification and decide for ourselves.

First and foremost, because there is no way for the Commonwealth to guarantee the availability of work, the Program merely requires “Community Engagement” instead of work. At first glance, that sounds like a reasonable policy, doesn’t it?

But there’s a catch. To assess whether a Medicaid patient satisfies the Community Engagement requirement, program managers must complete a calculation. Thirty hours of employment per week may meet the requirement, but there are many reasons for claiming a “temporary good cause exception” from work. Inclement weather, for instance, is defined as a valid reason, although the guidelines do not explain how any particular storm would trigger an exception.

Nevertheless, all hours and exceptions must be registered through an online time accountability system. Various Forms are produced by the system, with Form 834 utilized to report deviations from the Community Engagement requirement.

How complex is the language that explains these guidelines? Clause represents a typical set of instructions:

MCO CE Communication.

Members CE status and required CE hours must be provided by MMIS to the MCO’s on the 834, on at least a monthly basis for the current month. The MCO’s may send communication and outreach to members based on CE status received from MMIS.

Information received by the CE module regarding member good cause exceptions involving incidents that may invoke third party liability (TPL) must be provided by MMIS to MCOs for purposes of pursuing TPL payments.

There are also time accrual guidelines, time exclusion guidelines, and non-compliance “curing” guidelines. In addition, there are program suspension guidelines, reactivation guidelines, and grace period guidelines. Not to mention the existence of a completely separate section of guidelines regarding time spent on Education and Training activities!

To reiterate the questions that we asked in our previous post regarding Kentucky’s deductible accounts feature: How many government employees will be required to manage this work requirement system? How many will even be able to explain the system to baffled Medicaid recipients?

Employment is undoubtedly a worthy goal. But if Kentucky’s work requirement is simply too complex to succeed, its Medicaid program will inevitably fail.

Kentucky’s New Medicaid Program Emphasizes Flexibility And Choice, But Is It Too Complex To Succeed?

Trump Administration officials have approved the Commonwealth of Kentucky’s request to increase the level of choice in its Medicaid program. Even critics will find it difficult to criticize the request too vociferously; after all, flexibility is a worthy principle.

But individuals on both sides of the political aisle may wish to scrutinize the manner in which the Bluegrass State will implement this principle in practice. Will their procedures be simple, efficient, and easily manageable? Or will they be so complex that state workers, medical providers, and recipients will struggle to understand them?

According to the program specifications, a $1,000 annual deductible will be imposed on each Medicaid health recipient. But it will not function as a standard deductible because Medicaid recipients possess extremely limited financial resources. They couldn’t possibly afford such costly burdens.

So who will finance their $1,000 deductibles? The amounts will be paid by government cash accounts, known as “administrative deductible accounts.”

The government, of course, will also pay the costs that exceed the deductibles. So why is the government bothering to create separate deductible cash accounts?

Because 50% of each recipient’s unused deductible dollars will be transferred into a My Rewards Account. And recipients will be permitted to select a variety of dental, vision, pharmaceutical, and gym membership services to be financed by those unused deductible dollars.

Could program managers have designed a less complex approach for providing Medicaid recipients with flexibility and choice? Indeed, they could have simply loaded $500 (or 50% of $1,000) in credit onto Medicaid identification cards, and then invited recipients to spend the credit on a menu of optional services. Such features are called cafeteria plans in the private sector; they represent relatively simple methods for offering flexibility and choice.

But instead of opting for a cafeteria plan approach, the Kentucky HEALTH Program chose to create a deductible that is not truly a deductible, but that is financed by a government account that is called a deductible, that in turn produces dollars that are multiplied by 50% and then converted to Rewards points, that in turn are spent on services.

How many government employees will be required to manage that system? How many will even be able to explain the system to baffled Medicaid recipients?

Indeed, in the health care sector, it is relatively easy to applaud Kentucky’s principle of flexibility. But if it is unable  to implement that principle in practice, its initiative is likely to fail.